What now for Potash shareholders?

TORONTO – It is back to work for shareholders of Potash Corp. of Saskatchewan Inc.

A day after the government’s stunning rejection of the hostile takeover bid from BHP Billiton Ltd., the street was back Thursday trying to figure out what Potash Corp. is actually worth.

The stock was down about 4.5 per cent to $138.88 US in pre-market trading on Thursday morning, suggesting that the drop will not be extreme. A drop of that magnitude would leave it well above the offer prices of $130 US a share from BHP, evidence that the fertilizer market has dramatically improved since BHP launched its bid in August.

John Redstone, an analyst at Desjardins Securities, actually raised his price target on Potash Corp. by 22 per cent to $175 (Cdn) a share after adjusting his price-earnings multiple on Potash Corp. so that it matches up with Agrium Inc.

“(Potash Corp.’s) shares may be under selling pressure in the immediate future, but ‘once the dust settles’, we would use this as a buying opportunity,” he wrote in a note to clients, adding that he believes the potash market will remain tight going forward.

Meanwhile, the fight between Potash Corp. and BHP will continue Thursday in a Chicago courtroom.

A hearing is scheduled regarding the nasty lawsuit filed by Potash Corp., which it accused BHP of spreading false information in order to reduce its share price and make a takeover cheaper.